Is the current economic state of the nation affecting commercial real estate? NAR Chief Economist Lawrence Yun think so.

Yun reports that "although the supply-demand fundamentals are broadly favorable in most commercial real estate markets, vacancy rates are rising modestly and rent gains are slowing. Slow economic growth is lowering demand for commercial space, mostly in the office and industrial sectors. Despite the slowdown, the commercial real estate market is in much better shape compared to conditions during the 2001 recession.”

Partly to blame for the lowered demand is the credit crunch felt in many sectors. But Patricia Nooney of St. Louis, chair of the Realtors® Commercial Alliance Committee, says that despite this, "Institutional investors, along with foreign investors who are encouraged by the drop in the dollar, remain active in the current market."

For more on the state of the commercial real estate market, click here.